Thoughts of the week

December 30, 2024, has not only marked the upcoming new year, but also brought the second part of the EU’s MiCA Regulation into full effect. In 2025, industries will face new requirements for crypto-asset service provider (CASP) licensing and market abuse prevention, aimed at enhancing the legitimacy and stability of the European crypto-asset market. 

With Bitcoin surpassing the $100,000 milestone, investors and financial institutions are renewing their focus on crypto-related products, making MiCA's introduction particularly timely. As regulatory developments in the crypto universe make headlines in 2025 (not only in Europe, but also in the US after Trump’s triumph in the elections), we expect that a more developed framework will allow for blockchain technology services to gradually be integrated into our daily lives seamlessly. 

Two of the key aspects lie upon the following trends: Tokenization and Stablecoins. Tokenization enables digital asset representations, offering faster payments and seamless wallet integration via secure blockchain ledgers. Stablecoins, pegged to assets like fiat currencies or gold, stand out as practical and stable options for everyday use. 

We believe Europe's innovations go beyond these two trends, with notable efforts like the Digital Euro (a CBDC by the European Central Bank) and advancements in electronic identification and authentication systems. 

We suggest investors consider that, just as Bitcoin's institutional adoption and market cap grew after the approval of US spot ETFs, stablecoins could see similar growth as Europe and the US adopt more inclusive integration policies.

News of the week